SmartCap and KredEx chose the winner of the accelerator procurement

July 27, 2017

Seven teams
took part in the accelerator procurement, with four teams meeting the
qualification requirements. A final tender was submitted by three teams. The joint
tender submitted by Mobi Solutions OÜ and Astrec Baltic OÜ was chosen as the
winner.

The aim of the
accelerator procurement announced in October 2016 was to invest the financial
resources of the state venture capital fund managed by SmartCap in up to two
venture capital funds providing accelerator services (accelerator funds) for up
to 4.2 million euros per fund. A charge of up to 1.4 million euros per fund for
accelerator services will be added to that amount and financed from the
resources of a Structural Fund of the European Union. Pursuant to the terms and
conditions of the procurement, the winning tenderer must invest at least
360,000 euros of equity in the fund and involve at least 30% private financing
as compared to the total volume of the fund.

Just one
tender submitted by Mobi Solutions OÜ and Astrec Baltic OÜ met the terms and
conditions of the procurement. SmartCap will therefore invest in one
accelerator fund. The winning team now has six months to involve the required
private financing and create the fund. According to initial plans, the fund
will be established at the beginning of 2018. Within the framework of the
transaction, SmartCap will invest 4.2 million euros in the accelerator fund and
enter into a contract for accelerator services in a volume of approximately 1.4
million euros. The provision of accelerator services and investment activities
can thereafter begin.

According to
Sille Pettai, Member of the Management Board of SmartCap, interest from the
participants was very high. “We were reassured that it is possible in Estonia
to bring together several capable teams that have the prerequisites for
establishing a venture capital fund and that are able to apply a systematic
approach to investment management. We are also glad to see that clearly
distinct investment strategies were offered and different visions with regard
to accelerator services were provided. The procurement process was long and
comprehensive, but we were able to stick to the schedule we had earlier agreed
on. Regardless of several teams of great promise participating in the
procurement, we are currently only able to announce one winning tenderer. We
are going to carefully monitor the situation on the local market and review our
own terms and conditions and requirements. We will then decide whether and in
what manner to invest in a second venture capital fund,” said Pettai.

The winner of
the procurement boasts a high level of experience in the field and an excellent
international network. The team of Mobi Solutions OÜ and Astrec Baltic OÜ has
been able to prove its capacity to involve capital from international investors
and to invest in companies with international potential. The winning team
includes three entrepreneurs in the field of technology – Veljo Otsason, Rain
Rannu and Marek Kiisa – who have all gained valuable experience in establishing
and building start-ups and managing venture capital investments.

Veljo Otsason
and Rain Rannu are co-founders of Fortumo, a company providing international
mobile payment solutions, who are experienced in both involving venture capital
investments and entering the global market. They are both experienced angel
investors holding shares in more than 15 startups, which also include Pipedrive
and Taxify. Marek Kiisa is a noteworthy angel investor who was elected angel
investor of the year in 2014 by EstBAN, the Estonian Business Angels Network.
He was also one of the first investors in GrabCAD. In 2014, GrabCAD was sold to
Stratasys, a major manufacturer of 3D printers. This was one of the biggest
venture capital transactions in Estonia.

The
accelerator procurement marks the beginning of a new stage in developing the
investment strategy of SmartCap, as a result of which the venture capital fund
Early Fund II managed by SmartCap will continue as a fund of funds and
hereinafter invest in other investment funds with private investors who in turn
invest in start-ups with private financing.

For further
information please contact:

Sille PettaiMember of the Management Board of SmartCap+372 523 1675Sille.Pettai@smartcap.ee

AS SmartCap. Visit us at Hobujaama 4, Tallinn, 10156, Estonia. Call us +372 6161 100. Email us at info@smartcap.ee